Is the work getting done?
Whether you get down to the trench or manage your team from afar, every sales manager wants to have greater control over the team and be in charge of the ongoing operations.
Regardless of how you manage your team, your ultimate plan is to keep the sales team on the right track. Your goal is to have a data-driven sales strategy, without which the company is deaf and dumb.
You might be working for an age-old company, but you will never know your objectives, high-level tactics, target audience, and potential stumbling blocks if you don't have a solid sales plan.
In that case, you'll be wondering if the work is really getting done. But if you're keen about hitting jackpots in sales, you need to set things right.
Do you think awards are just restricted to Hogwart students?
Points for doing good deeds, answering correctly in class, or winning a Quidditch Match. No brownie points for rule-breaking.
The same goes for tracking sales. Sales are measured by how much it has grown in a fixed span.
What is a sales metric?
Sales growth uses metrics to measure revenue increase over a fixed period. Your business is at risk, behind competitors, and static without profit.
To measure your profit or inflow of excess revenue, you need to make sales tracking — the process of recording and analyzing all sales interactions starting from the first call to the final deal closing.
Sales tracking is documenting and monitoring all sales interactions from the first reach out to the last deal closer call.
The document includes contact details, the first POC, the steps taken in the sales funnel, and ultimately the conversion factor - turning the prospects into customers.
The sales metric is the collection of data that helps you understand what works for you and what does not. You use them to evaluate your sales performance. It helps you keep tabs on every level of your sales process - from prospecting to follow-up.
There's no fixed standard to measure business growth. Two businesses can never have the same level of productivity because they deal with different products. Each company has a different growth rate, and it would be unfair to say, "one size fits all."
Align with your unique sales metric and produce consistent results. You can create a sales plan to scale up your process based on your success rate.
Sales metrics indicate the performance of an individual, team, department, and company. Monitor the boosting techniques and see how you can do adjustments where needed.
Instead of having a hunch or assumption, you can rely on science-backed data. There is no place for guesswork in the sales process. You need well-researched, interpreted, and implemented data based on metrics and KPIs.
Set your priorities right and be well-informed about your sales performance by tracking the right way.
17 sales metrics and KPIs used in everyday business
How do you compare and measure your performance with the rest? How do you know you have the edge over your competitors? What’s your annual business turnover?
Here are 17 sales metrics and KPIs you must know to see how well you’re carrying out your responsibilities as sales reps or business:
Sales Growth: Sales Growth: It's about finding if your business is growing steadily or is stagnant. Tracking is to see whether you're overperforming, underperforming, or stagnant.
Suppose you’re consistently bringing positive sales growth in a period; it's a clear sign that you follow the sales goals. Your goals are centered around winning inbound and outbound sales.
Sales Target: You have to keep an eye on reaching your sales goals. You can generate sales reports for better sales strategies using sales reporting software.
The sales report is a summary of your business activities. It includes sales volume, leads, tip-offs, new users, profit, and expenses for a given period.
Setting sales goals help you achieve your targets one step at a time. Want to know if you’ve reached your target? Expect to measure your actual outcome.
Customer Acquisition Cost: Customer acquisition cost (CAC) refers to the money spent on getting a new customer, which differs for every business. If you’re an online marketer, the money is incurred in running Ads.
Your goal is to increase your return on investment (ROI). With CAC, you can see how much you’re spending on what and if you’re getting the desired results. You know you’re making a profit when you get more than you spend.
Average Revenue Per Unit (ARPU): ARPU refers to the average money you make per person. You can find it by dividing the total revenue per month by the number of customers.
Once you know the earnings per user, you can ideate the product's profitability. The metric is commonly used for companies based on users and subscribers, such as telecom services and media.
For instance, users pay a certain amount to watch their favorite online shows on OTT platforms. These business models are based on subscriptions. The revenue that comes from signing up to access the streaming platform is weekly, monthly, or annually.
Customer Lifetime Value (CLV): Over time, you build a strong relationship with your customers. The average revenue generated through the recurring customer fee.
CLV denotes the future cash flow of your company. The relationship you have with your customer matters a lot in this process. Your earnings per customer is a measure of your relationship. Hence it’s called lifetime.
Customer Churn Rate (CCR): Not everyone will be your cup of tea. Customers will come and go, but business will still go on forever. The customer churn rate shows the number of customers who fall off or stop subscriptions.
Winning and losing are normal in business. But, with CCR, you have a realistic view of customer retention within the timeframe.
You will lose more revenue when your churn rate is high. The increase in churn rate calls for developing strong retention strategies that provide and extract from existing customers.
Average Sales Cycle Length: As a sales rep, you want to close the deal fast. Nobody wants to keep the process hanging. Everyone wants to see the result of the sales cycle.
But how do you shorten your sales cycle? Optimization is the way to find instant results. Sales cycle length is the space between your start with the sales calling to the point of closing deals.
The number of days you take to complete the deal impacts the other business processes. Sometimes, the sales process feels like a slow race to reach the finish line. You can’t finish up in 3,2,1, and go! You have to take one step at a time to reach there.
Lead-to-Opportunity Ratio: Not every lead is qualified at the start. A qualified lead matches your requirements and proves to create a potential opportunity.
The common way to identify whether the lead hits the standards or not is easy. You can use the BANT method to analyze budget, authority, need, and timeline requirements.
You’re prospecting whether the lead is worthy of becoming a customer through this study. The lead-to-opportunity ratio understands the lead, the baseline of your investment, and creates your needs and target, making revenue predictability easier.
Opportunity-to-Win Ratio: Once the leads are qualified in your sales calling process, you still have to see how many qualified leads result in closing a deal.
With this KPI, you can track how the talk with qualified leads can turn into money. You can see how your conversation with them sparks closure.
Lead Conversion Ratio: Stability is an important thing in the business process. Lead conversion ratio refers to the proportion of qualified leads your company needs to keep your team running in full swing.
Your stability in sales denotes you’re in good shape. A low lead conversion rate implies the weakness of sales pipelines. Your steps in the sales process have to generate sales leads.
Number of Sales Opportunities: Your sales opportunities in the existing and future play a crucial role in making valuable decisions.
Your opportunities should always be your priority in managing your metrics and KPIs. Knowing what’s important to your business and what isn’t is a skill to learn.
For example, you can value unqualified leads in marketing metrics but may not be valued in sales. Only qualified leads matter for sales. Your leads can’t make it for sales calls with a lack of data.
You can track the new opportunities and potential purchase value as it helps you identify roadblocks at the earliest.
Additionally, this KPI also helps to compare your current and yestermonth performance.
Sales Opportunity Score: The basic requirement for every sales opportunity is to meet the minimum requirement of the lead. But, since every opportunity differs, you need a scoring system, a KPI that assigns a standard value to each sales opportunity.
The score of the sales opportunities creates an order of importance. You have a list of opportunities ranging from high to low priority for a systematic workflow.
Even in such a competitive market, you can set your mark with the right sales target with the right metric.
Average Purchase Value: While the world is running out of resources, business needs sustainable planning. The average purchase value is one of the sales performance metrics you can use for sustainable development.
You can recalibrate your sales growth strategy, revenue projections, and prediction using this metric. This KPI is the average value of each purchase made by your customers and often compares to the average number of users per transaction.
The metric is used for comparing past performances and opportunities.
Revenue Per Sales Rep: While the sales reps are working day in and day out to bring leads, it is important to check their everyday stats. You need to know if your team is hitting the quota, reaching the targets, learning, and performing what they need to do.
This metric measures the revenue each sales rep brings to the company. This measurement is the indicator of their performance. They are rewarded or given sales training to ace the skills based on how they perform. The KPI will give you a clear insight into the sales rep’s work in the team. You can train them to improve the team's performance.
As a sales manager, you need to set actionable goals, analyze from time to time, and find the average that you can tweak based on the sales target.
Profit Margin Per Sales Rep: This KPI elaborates on the profit margin of each sales representative. Knowing who is getting more profit from the team, the management can give them a special commission or bonus for extraordinary work.
If the team member isn’t getting the right result, you can allocate their problem with the right resources to deliver the best outcomes.
Comparison between the sales reps will show you where they stand in the game. You can identify their strengths and weaknesses to teach them sales techniques.
Upsell & Cross-Sell Rates: Effective upselling and cross-selling tactics within your team can increase the ROI and profit in the long term. Use your existing clients and customers to generate more as it’s economical.
Going for new leads can be expensive and time-consuming. You can introduce your existing players to upgrade themselves and use cross-selling to focus on related products or services through up-selling.
Up-selling grows the revenue with a higher-level product, while cross-selling does the same by relatable product suggestions.
You can increase the quality, trust, and level of satisfaction using this metric. Monitor upselling and cross-selling products and see which is doing well.
Incremental Sales by Campaign: You have to run “n” a number of campaigns in a day to push your product, build your website visibility, and draw attraction - the important marketing activity.
The campaign is the key performance indicator to show total sales in the marketing activity. It shows from where the leads were generated - email, social media, or any other source.
Thus KPI is useful in finding the best possible way to catch attention and generate leads for sales.
You have to think about the best campaigns and monitor the pattern of overtime results to plan result-proof strategies.
Additional ways to track company’s performance
- Percentage of revenue from existing vs new business
- Annual growth
- Win/conversion rate
- Amount of qualified leads
- Percentage of leads conversion in the sales funnel
- Successful calls/emails
- Users lost to the competitor
- Average contract time
- Open rate and response rate for emails
- The average time a prospect spends in a part of the sales funnel
- Number of proposals sent
- Assessing quality leads through different acquisition methods
The primary aim of sales tracking is to measure the conversion rate with the current sales process and see how you can improve to skyrocket the sales.
What is a sales reporting dashboard?
Many think Spreadsheet is still the champ for analyzing the data. They miss out on a lot that Spreadsheets can’t do.
Sales dashboards provide visual sales reports, including the overall sales performance during a fixed timeframe.
With Ai-powered tools, all sales data is automatically pulled out in one report. You don’t have to manually enter the data or switch to another software to execute the process. Good sales reporting software is all in all.
All the features are integrated to make data accessible at any given time from anywhere. The benefit of using a pre-built sales dashboard is that it saves time and effort.
Modern sales dashboard solutions offer a sales reporting template with built-in sales metrics and visuals that make it engaging, appealing, and self-explanatory. You can never go wrong with forecasting with advanced sales rep tools.
What is sales reporting?
A comprehensive statement or record of all sales activity happening within a company over time is called a sales report or analysis report.
It’s a detailed insight into the company’s performance, enabling effectiveness in monitoring everyday workflow. You get an overview of the sales process and the functions of the business.
You can track the pattern of the sales funnel and the sales volume for the period. (The sales volume refers to the number of units you have sold during a reporting period. The sales funnel depicts the customer’s journey from the first reach out to deal closing.)
With the analytic information, you get clear with the facts and figures of your company. It gives solid data to stand your point.
Knowing how to read sales reports is also essential to understanding the performance of the sales reps.
The sales team, management, and clients can easily use the sales performance dashboard to track and make timely decisions.
The sales dashboard has clear and reliable data that can help your business planning.
You know, sales tracking and making a consolidated report using well-researched data. Build a relationship with your customers/clients and team that raises the bar of productivity in the market.
You’re one step closer to sealing your deals with the right metrics!
Results first, payment later.